The head of Ukraine agribusiness giant Astarta Holding
forecast a "substantially" better long-term business climate, and revealed
an appetite for further land acquisition, even as troops clashed with
pro-Russian protestors in the east of the country.

Viktor Ivanchyk, the Astarta chief executive, said that "ongoing
changes" in Ukraine - which last month signed a political association with the
European Union – would "lead to the fundamental transformation of the country".

"In the mid- and long-term outlook, these reforms shall
substantially improve the business environment, attract foreign and domestic
investments, and unlock value potential," he said, highlighting concessions
made by the European Union on imports of Ukrainian products.

The EU will from next Wednesday scrap import duties on some
Ukrainian exports, such as sunflower oil, for which the duties of 2.9% on unrefined
oil and 6.1% on refinished product will be ditched.

It is also proposing a new zero-duty imports of 950,000
tonnes for Ukraine wheat, and 250,000 tonnes for barley, besides considering quota
on sugar too, initiatives that Mr Ivanchyk said were "positive for companies
like Astarta".

'Period of
macroeconomic instability'

He acknowledged that "in the near-term, Ukraine might face
the period of macroeconomic instability and will have to adopt additional
savings measures".

The comments came an effort by Ukrainian troops to retake
facilities in the east of the country seized by pro-Russian forces reportedly ran
into stronger opposition, after winning back an airport.

However, Astarta - many of whose facilities are in Ukraine's
troubled eastern region - revealed that it would this year extend an investment
programme, with the aim of expanding its sugar processing facilities, boosting
grain storage capacity and expanding its land bank.

The group last year had 245,000 hectares under cultivation, an
area nearly the size of Luxembourg, or the UK county of Leicestershire.

'Very challenging
year'

The comments came as Astarta unveiled a 48% plunge in
earnings last year to 234.0m hryvnia, which the group reported equivalent to E25.7m,
on revenues up 8.8% at 4.01bn hryvnia (E369.5m).

The drop reflected one-off charges, such as a doubling in
the write-off on VAT reimbursements and a change in accounting which incurred a
41.8m-hryvnia property impairment charge.

However, the group also unveiled a 12.1% drop in gross
profits from agricultural operations, as it negotiated what it termed a "very
challenging year for agricultural commodities", as prices were depressed by
improved harvests, including a 36% rise to a record 63m tonnes in Ukraine's
grains production.

Astarta's gross profit in sugar - its key product, in which
it is Ukraine's biggest player – fell 17.8%, amid a difficult market thanks to
oversupply.

"The domestic sugar market faced significant consolidation
as many inefficient producers quit being not able to tolerate low sugar prices
stemming from the two consecutive years of overproduction," Mr Ivanchyk said.

Shares fall

He forecast better times for the sugar market ahead, saying
that domestic sugar supply and demand were "currently close to a match, which
provides good grounds for price recovery".

With Astarta maintaining its production last year, allowing
it to boost to its market share to 26% from 19% in 2012, and with price rises
on the horizon, the group was "optimistic" over prospects in the sector.

Nonetheless, with the group's profits falling short of
market forecasts, Astarta shares, which are listed in Warsaw, dropped 4.9% to
stand at 39.01 zloty in afternoon deals.